Side-Saddle Madness

Clinton let GM off the hook for its fire-prone gas tank — but newly released documents show GM concealed crucial evidence.

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The 1970s were a good time for bad fuel tanks in American cars. While Ford’s reputation plunged with the exploding Pinto, General Motors was coolly producing its C/K line of pickup trucks which positioned the fuel tank “side-saddle,” on the side of the truck outside the frame, a safety defect which eventually caused far more burn-deaths in crashes than the Pinto ever did. But despite numerous similarities between the two cases—including political arm-twisting at the White House, hidden cost/benefit analyses, and courtroom showdowns with disgruntled whistleblowing engineers—the final outcome for Ford was a disaster, while GM cut a deal with the Clinton administration and never had to recall a single truck.

But GM’s luck may be running out. Last Tuesday [2/17], Broward County, Fla. circuit judge Arthur Franza ordered GM attorneys to produce secret documents that until now have been hidden behind the attorney-client privilege. The newly released documents show that GM’s key witness in side-saddle tank lawsuits told his lawyers a story very different from his sworn testimony to juries, suggesting that GM knew all along it could prevent hundreds of deaths by making a cheap repair — and that GM lawyers coached Ivey’s testimony for years.

The documents also reveal that Special Prosecutor Kenneth Starr, acting as a GM attorney, went to extraordinary lengths to suppress evidence of that witness’ flip-flop.

In 1973, GM engineer Edward Ivey wrote a cost/benefit analysis memo—eerily similar to the most damning evidence against the Ford Pinto—in which he estimated GM’s cost of liability for burn deaths caused by its fuel tank design. Like his counterparts at Ford, Ivey assigned a human life the value of $200,000; based on that, he figured burn deaths were costing GM $2.40 for every GM vehicle on the road. Ivey’s memo, along with other internal GM documents estimating the cost of potential fixes for the C/K gas tank, indicate that GM knew it would be cheaper to risk lawsuits from burn deaths than to recall and fix its automobiles. To counter that impression, GM has insisted in case after case that the Ivey memo was not written at the instruction of the company. Ivey himself has testified many times that he cannot recall why he wrote it, or whether he distributed it to anyone.

But the newly released documents tell another story. One of the documents is a report of an interview with Ivey by GM attorney Don Howard, who plainly quotes Ivey saying that he wrote the memo “for Oldsmobile management,” and that he believed he probably circulated the report to five or six specific managers and engineers. Howard’s report concludes that Ivey “is not an individual whom we would ever, in any conceivable situation, want to be identified to the Plaintiffs…and the documents he generated are undoubtedly some of the potentially most harmful and most damaging were they ever to be produced.”

In another interview document, a GM attorney notes that Ivey “received material from Product Analysis…related to deaths by auto fire. Purpose: How much money would we spend on each car to prevent it. Did not do it on his own. Wallace probably gave him assignment…assignment could also have been given by Frank Ball.”

“I don’t know how they can skate around this,” said Ralph Hoar, whose product safety consulting firm works for plaintiffs in GM fire cases. “This is the legal equivalent of being caught with your pants down. These documents clearly show GM lawyers coached Ivey.”

The original Ivey memo, taken together with other internal GM documents which priced potential fixes for the C/K gas tank, indicates that GM knew of the hazards of the fuel tank as early as 1973, and knew that hundreds of needless burn-deaths could be avoided if they heeded the warnings of their engineers and installed a protective cage around the fuel tank. In one 1982 document, GM engineers calcluated that the fix would have only cost $23 per truck.

In a statement issued last week [Monday 16], GM spokeswoman Mary Henige said “Any suggestion that GM does not care about product safety is reprehensible and typical of conspiracy-obsessed, contigency-fee lawyers…and GM believes that a dollar value cannot be placed on a human life.”

Of course, that’s exactly what GM engineer Edward Ivey did.

Documents related to the Ivey interview were jealously suppressed behind the attorney-client privilege by none other than Special Prosecutor Kenneth Starr, who many are saying has now been caught concealing evidence.

Clarence Ditlow of the Center for Auto Safety, who has closely followed the history of GM and its C/K trucks, finds this ironic. “This is a dilemma for Starr,” said Ditlow. “The underlying problem is fraud on the court and if (Starr) continued to conceal documents then he committed fraud on the court.” PERJURY?

Plaintiff’s lawyer James Butler, Jr. has handled 10 GM pickup fire cases, three opposite Kenneth Starr. “The consequences [of the release of these documents] are so staggering that I really am at a loss for words,” said Butler. “We’ve been pursuing these documents since ’91 in various cases. Ivey has testified that no one asked him to do this and GM has said no documents relating to Ivey existed.”

Butler could not say whether any of those cases will be reopened, but allowed that “That is under consideration.” In the absence of the secret Ivey documents, some of the key evidence in those cases was videotapes of 24 crash tests where GM ran cars into the sides of its C/K trucks — in each case the fuel tank was ruptured, sometimes covering the car in a yellow spray of mock fuel.

From 1973 to 1987, GM produced about 9 million C/K pickup trucks with side-mounted fuel tanks. GM’s initial reasoning for using the side-saddle tank was to store more fuel than its competitors could, but in order to do so they had to place it outside of the frame. Since 1988, all GM trucks have the tank placed within the frame.

“There are more fatalities from front side-swipes than direct side-impacts,” said Ditlow, whose complaints to the Department of Transportation led to open its third investigation in 1992.

Transportation Secretary Federico Pena issued the DOT’s findings on Oct. 17, 1994 that a safety defect did indeed exist in the C/K vehicle which had killed five times more people than the recalled Pinto, and furthermore that GM had known about the hazard for at least a decade yet had chosen not to fix it.

But somehow GM never had to recall its trucks. Before the DOT went ahead with its next requirement, a public hearing set for Dec. 6, GM and other auto companies applied heavy political pressure to the administration, including a direct appeal to the president.

In a letter written to President Clinton in November, just three weeks before the settlement, the presidents of the Big Three auto companies pleaded with Clinton to review Pena’s “safety defect” decision. They argued that it threatened “the entire automotive industry” because it was not based on the federal-standard crash tests that GM had passed.

On Dec. 2, Pena announced a settlement: GM would pay $51 million towards various federal safety programs instead of having to recall its C/K trucks, which would have cost an estimated $1 billion. Critics howled that GM was settling for “five cents on the dollar.” GM reported earnings last year of $6.7 billion.

NHTSA’S reasoning for settling with GM was simple: They estimated that approximately 32 more lives would be lost if the trucks were to remain on the road, compared with what they reasoned would be hundreds of lives saved through the purchase of 200,000 child safety car seats, public education programs on seat-belt and drunk-driving laws, and several research programs made possible by GM’s $51 million. They also concluded that the settlement would save years of litigation to force GM to recall its trucks.

“I was opposed to that settlement,” Ralph Nader told the MoJo Wire. “GM had high-level contacts in the White House, and they put the pressure on,” he said, naming Treasury Secretary Robert Rubin, who at the time was President Clinton’s economic adviser. Days after the settlement, the Wall Street Journal reported that a GM attorney had discussed the case with former Democratic Party chairman Robert Strauss, who in turn told Rubin and White House counsel Abner Mikva that Pena’s proposed recall was a “dumb decision.” A Treasury spokesperson last week denied Secretary Rubin’s involvement in the case.

Many of the internal documents, emerged when company whistleblower, Ronald Elwell, a retired engineer from GM was testifying in case after case against his former employer. GM made an gag-order agreement with Elwell but GM C/K victims appealed the decision all the way to the Supreme Court. On Jan 14, 1998 the court ruled against GM with the result that people from any state can subpoena him for their case.

Despite the millions of dollars GM has paid in court judgments and out-of- court settlements, Ditlow says that GM has come out of this with free advertising and a huge tax break.

“They are taking blood money out and using it to feather their own nests,” said Ditlow.

Fact:

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